As healthcare and healthcare coverage continues to evolve in the United States, more Americans than ever before are looking for insurance plans that stray away from the standard HMO and PPO plans. Through this shift, the healthcare industry has seen a rise in another coverage competitor, indemnity plans. The attraction of these plans comes from the freedom and flexibility that the programs offer their customers.
Also known as “Traditional Indemnity Plans” or “Fee-for-Service,” these plans guard consumers against the high costs of medical bills by covering a percentage of the fees accumulated from medical procedures. And unlike other insurance plans, indemnity plans allow consumers to choose their primary care doctor; differing from the larger HMO and PPO plans that may force members to accept a doctor as part of their program. With indemnity plans, patients are free to choose their doctors, hospitals, urgent cares, or providers as they see fit, knowing that their policy will cover a portion of their expenses.
Additionally, when patients need a specialist, they can self-refer themselves to the specialist of their choosing, instead of requiring a doctor’s referral to receive coverage for a specialist. This luxury is available to consumers who use indemnity plans because these plans don’t have a provider network, shielding people from having to choose a doctor from a list of potential providers.
Regarding cost, indemnity plan customers will pay the cost of their medical expenses up until they have reached their deductible, like an HMO or PPO, with deductibles typically ranging from $100 to $500. Like usual, once your deductible is paid, your coverage takes over. And though these plans usually run a little more out of pocket than differently structured plans, some find the ability to choose their providers to be worth the extra cost.
So, the question is, is an indemnity plan the right choice for you and your family? The answer lies in the advantages you want out of your health insurance plan. If you are willing to pay more out of pocket costs to choose your providers, live in a geographic area where providers wouldn’t be included in HMO or PPO plans, and wish to break free of provider networks, then indemnity plans might be right for you. In some cases, factors like budget and stiffer structure encourage other to seek coverage elsewhere. In the end, the freedom to choose is what makes the United States what it is today.